A wafer processing method includes: cutting a device layer stacked on a semiconductor substrate along division lines to form cut grooves; positioning a focal point of a laser beam having a transmission wavelength to the semiconductor substrate inside an area of the semiconductor substrate corresponding to a predetermined one of the division lines and applying the laser beam to the wafer from a back surface of the wafer, thereby forming a plurality of modified layers inside the wafer along all of the division lines; and grinding the back surface of the wafer to be thinned, causing a crack to grow from each of the modified layers formed inside the area of the semiconductor substrate corresponding to the predetermined one of the division lines to the front surface side of the wafer, thereby dividing the wafer into individual device chips.